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Enlarge ImageRequest to buy this photoKatherine Taylor | The New York TimesDr. Suzanne Salamon of Harvard University discusses how pay affects hiring. Her patient is Ralph Jacobson at Beth Israel Deaconess Medical Center in Boston.

By Elisabeth RosenthalTHE NEW YORK TIMES • Friday February 14, 2014 6:59 AM

American physicians, worried about changes in the health-care market, are streaming into
salaried positions with hospitals. Although the shift from private practice has been most
pronounced in primary care, specialists are following.

Last year, 64 percent of job offers filled through Merritt Hawkins, one of the nation’s leading
physician-placement firms, involved hospital employment, compared with only 11 percent in 2004. The
firm anticipates a rise to 75 percent in the next two years.

Today, about 60 percent of family doctors and pediatricians, 50 percent of surgeons and 25
percent of surgical subspecialists are employees rather than independent.

“We’re seeing it changing fast,” said Mark E. Smith, president of Merritt Hawkins.

Health economists are nearly unanimous that the United States should move away from
fee-for-service payments to doctors, the traditional system in which private physicians are paid
for each procedure and test, because it drives up costs by rewarding overuse.

But experts caution that the change from private practice to salaried jobs might not yield
better or cheaper care for patients.

“In many places, the trend will almost certainly lead to more-expensive care in the short run,”
said Robert Mechanic, an economist who studies health care at Brandeis University’s Heller School
for Social Policy and Management.

When hospitals gather the right mix of salaried front-line doctors and specialists under one
roof, it can yield cost-efficient and coordinated patient care. But many of the new salaried
arrangements have evolved from hospitals looking for new revenue and could have the opposite
effect.

For example, when doctors’ practices are bought by a hospital, a colonoscopy or stress test
performed in the office can suddenly cost far more because a hospital “facility fee” is tacked
on.

Likewise, Smith said, many doctors on salary are offered bonuses tied to how much billing they
generate, which could encourage them to order more X-rays and tests.

Hospitals have been offering physicians attractive employment deals, with incomes often greater
than in private practice, because they need to form networks to take advantage of incentives under
the Affordable Care Act.